Colonial seeking new CEO

Saturday

Colonial Co-operative Bank is searching for a new CEO and making other changes to comply with an order from state and federal authorities who found problems in the bank’s management and finances.

Joseph D. Guercio, senior vice president and chief loan officer, is serving as interim chief executive of the small bank while the board pursues a search for a permanent CEO. Former CEO Eleanor J. Fox stepped down last year after more than a decade on the job.

“There was a mutual agreement between her and the board that it would be best to find new leadership at the bank,” said Peter Conrad, president of Co-operative Central Bank in Boston, which provides cash reserves to co-operative banks in Massachusetts.

Mr. Conrad said he is helping the Gardner bank, which has two offices and about $72 million in assets, as it works to meet the stipulations in the consent order with the Federal Deposit Insurance Corp. and the state Division of Banks.

The order calls for the board of Colonial Co-operative to be more involved with bank affairs. It also asks the bank to hire senior managers, develop a strategic plan and a profit plan and take steps to improve the quality of its assets.

Mr. Conrad said the bank’s troubles stem from the real estate market. “It was related to asset quality,” he said. “North Central Massachusetts has lagged the rest of the commonwealth, so they still have a lot of loans that are underwater. That said, most of the bank’s customers are paying their loans as agreed.”

The bank’s deposits remain fully insured. Customers have stayed with the bank even after the consent order was made public last month, Mr. Conrad said.

In a consent order, a bank admits no wrongdoing but agrees to address the issues raised by regulators.

Never miss a story

Choose the plan that's right for you.
Digital access or digital and print delivery.